On December 20, 2010, in Minneapolis, Minn., Russell Cole was sentenced to 180 months in prison for conspiracy to commit mail fraud and wire fraud, wire fraud, tax evasion, conspiracy to commit money laundering, and conspiracy to defraud the U.S. government.

His wife, Abby Cole, was sentenced to three years of probation for conspiracy to commit mail fraud and wire fraud, conspiracy to defraud the United States, and tax evasion. Also, Robert Bossany was sentenced to 90 months in prison for conspiracy to commit honest services mail fraud and money laundering. All three were in a scheme designed to defraud a major retailer by over-billing for computer parts. As a result of the scheme the Coles and Robert Bossany invoiced the major retailer for $41 million more than the original bids for the products. Furthermore, Russell Cole misrepresented on individual and business tax returns the sales and profit from an eBay business he ran.

From 2005 to 2007, Russell Cole understated his net income from the Internet business by more than $1.8 million. In addition to understating his businesses gross receipts in general over a four-year period, the Coles understated the company’s gross receipts by more than $3 million for 2006 alone. The Coles also overstated on business tax returns the cost of goods it sold. To that end, they directed company employees to inflate the cost of parts purchased from suppliers and enter false purchase orders into the company’s books and records. Moreover, the Coles paid for a large amount of personal expenses, including credit card debt and a number of luxury purchases, such as high-end jewelry and month-long stays at luxury hotels in Las Vegas, with business funds. They then classified those expenditures as business expenses on the company’s tax returns